This is identified to be a defect in version 12.7. SE is working on a fix.

Resolution / Workaround:

smldapsetup command provides few options for standard directory servers that can be configured with Single Sign On for policy storage.

Screenshot from smldapsetup:

smldapsetup can be executed with an argument "-m[n]" during the setup, where n will be the type number against your policy store type being used.

E.g. smldapsetup ldgen -fsample.ldif -m[10], where 10 is the directory type for AD LDS. This type number shows <win 2008> but can be used for <win2012> (tested) and then the command creates a valid schema output sample.ldif file.